MicroStrategy was the headline story Tuesday when it announced that it had acquired an additional 319 bitcoins in a sharp price decline, unaffected by ongoing market turmoil.
According to a U.S. Securities and Exchange Commission filing, the software company that Michael Saylor founded spent $6 million to buy it. This makes it the largest crypto-related corporate owner.
The company’s shares didn’t see this as a positive, and they fell 6% Tuesday morning after Saylor’s purchase was disclosed.
MicroStrategy’s shares dropped from $200 to $193.72. MSTR has since recouped some of its losses and is currently trading at the $200 level.
MicroStrategy stock prices are dropping at an alarming rate
MSTR stock is falling faster than cryptocurrency’s price. It has also outperformed Bitcoin’s rise over the past year. It fell up to 30% in just two days in January.
This analytics software developer used all the recent bitcoin price drops to increase its hold of the most traded cryptocurrency in the world.
Bitcoin trades at $18,880 as of Wednesday’s writing. This is 6.5% less than the previous seven days according to data from Coingecko. Ethereum, the most popular altcoin, traded at $1328, down 16% over this week.
MicroStrategy revealed earlier this month that it had reached a deal to sell Class A common stocks for up to $500,000,000. This means that a portion will be used to purchase additional Bitcoin.
The company’s cryptocurrency holdings now amount to just over $2.48 Billion, with Bitcoin trading at $19138 at the time. This amounts to an unrealized loss exceeding $1.5 billion.
Pressure on corporate trading
The U.S. Securities and Exchange Commission made an unfavorable accounting ruling and the crypto market sell-off put pressure on the company.
Saylor rose to prominence in Bitcoin after implementing a BTC accumulation plan in 2020. He has since resigned as CEO.
“My primary focus is bitcoin advocacy and education, such as with the Bitcoin Mining Council, as well as serving as a representative and envoy for the global bitcoin community,”During last month’s earnings conference for the second quarter 2022, he stated these words call.
Now, the MIT graduate holds the position of Executive Chairman, allowing for him to concentrate more on Bitcoin-related issues.
Despite speculation that Bitcoin’s recent drop in value caused the transition, Saylor denies that this was true.
BTC total market capital at $367B on the daily chart| Source: TradingView.com Yahoo Finance, Chart: TradingView.com